AALL 2016: Disruption in the Legal Industry
Some panels at conferences feel as though you are being talked to, while others make you think “what are they thinking?” The AALL 2016 panel on Disruption in the Legal Industry: What’s Arrived and What’s Coming delivered an engaging session on a subject you have certainly heard at a conference before.
The panelists included: William Hornsby, ABA Division for Legal Services; Daniel Katz, IIT Chicago-Kent College of Law; Daniel W. Linna, Jr., Michigan State University; Kingsley Martin, KMStandards LLC; R. Amani Smathers, Davis, Wright, Tremaine LLP, De Novo; with John Mayer, Center for Computer-Assisted Legal Instruction, serving as moderator.
The session opened with each panelist weighing-in on Clayton Christensen’s definition of “disruptive innovation,” which he describes as, “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.”
The panel noted that disruption is likely to not cause you to lose business overnight, but rather a force that could take a bite out of business at a rate of 5 percent a year. That may not seem like much, but as the panel noted, simple math and a modest five year timeframe can mean 25 percent of your business. But the outlook is not completely dire as several large, institutional players and firms have created R&D departments to stem the impact.
Disruption also has modified the focus of the legal industry, leading to increased collaboration and engagement. One panelist stated that as organizations attempt to use innovation to replicate what a lawyer does, “You can’t automate chaos. You can’t automate what you don’t understand.”
During the course of the panel, innovation was classified into two segments. First was “sustaining innovation,” where change is adopted by the incumbents enabling the market leaders to stay as market leaders. The other was “disruptive innovation” where there is a low-end entry into the market and grows from its niche offering, moving up the value chain.
With everything from artificial intelligence to e-discovery and blockchain discussed as disruption and innovation, there were two general views noted at the beginning as to where all this will take the legal industry: optimistic or pessimistic.
In the end, you have to look at the situation and ask yourself, “Is your glass half full or half empty?”